Is your startup or company in a growth phase? Are you considering making the leap to other markets soon? To venture to land in other countries, companies usually have some investment, taking into account all the new expenses that are going to be generated (new headquarters, hiring staff, travel expenses for managers, etc.).
For example, in the case of startups, it is common for internationalization to occur after a funding round has been closed and the business in Spain has some consolidation.. When it comes to a corporation, sometimes the joint venture formula is used, attracting resources from another party, in order to create a new company in that territory.
In addition, there are other ways, such as COFIDES. Financing entity for “private and viable investment projects abroad in which there is a Spanish interest”. It does so through equity and debt instruments in the medium and long term. It manages its own resources and also the Fund for Foreign Investment (FIEX) and the Fund for Foreign Investment Operations for Small and Medium Enterprises (FONPYME). As part of its other mission, that of contributing to the development of developing and emerging countries, it is also accredited to the Green Climate Fund (CGF), an initiative sponsored by the United Nations to finance projects for mitigation and adaptation to climate change in developing countries.
COFIDES has the capacity to finance projects in any country in the world.
What type of projects are eligible for funding
The firm financially supports Spanish companies that launch into new countries, either through a subsidiary or branch or through a joint venture such as the one we have mentioned. Funding will only be offered for the following cases: - Opening of a commercial office.- Expansion of previously existing facilities.- Acquisition of a company in the country.- Creation of a new company.
Among its financial instruments, COFIDES uses equity (minority, transitory and with a repurchase agreement with the Spanish investor) and senior or subordinated loans.
What does the FONPYME line consist of
Small and medium-sized companies that are going to internationalize can take advantage of the FONPYME fund. What requirements are necessary to obtain this funding? First, resources must be allocated to investment in non-current assets, security stocks and the expenses of the first year of activity in the foreign non-industrial subsidiary.
The minimum amount to be financed starts at 75,000 euros, with a ceiling of 5 million euros. If the amount requested exceeds 3 million euros, there is an equity option. The company buys back equity with a maturity period of 3 to 5 years. Companies that want to apply for this line should keep in mind that it has three phases: commercial/admissions, analysis and that of the approval committee. For admission, a business plan, a project plan and the financial statements for the last two years plus the close of last year are requested. For the analysis, positive EBITDA is studied, an audit from the last year is taken and the viability of the company or project is verified.
The FONPYME line is a co-investment loan that is subject to EURIBOR as a variable interest rate and to 1-3% as a fixed interest rate. It has a grace period of 2 years, with amortization between 5 and 6 years.The funding covers up to 70% of the budget, with the remaining 30% to be borne by the company. Normally, the loan is granted on average an interval of 2 to 3 months from the request.
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